Interim Results

Young & Co's Brewery PLC 15 November 2007 15 November 2007 INTERIM RESULTS For the 26 weeks ended 29 September 2007 Financial highlights Revenue £63.9m +11.9% EBITDA* £18.0m +77.5% Operating profit* £12.1m +72.1% Profit before tax £4.3m +867.4% Profit before tax* £10.9m +89.2% Earnings per share* 69.47p +105.8% Interim dividend per share declared 24.00p +33.3% All of the results above are on continuing operations. * Adjusted for exceptional items, premium on redemption of debenture, and discount of site proceeds. Operating highlights • Total managed house revenue +13.6% with operating profit +33.0%; • Like for like managed house revenue +5.7% on same outlet basis and +1.9% on an uninvested basis; • Food sales growth +23.9%, helping offset any possible effect of the smoking ban; • One pub acquired for £3.5 million; with £4.9 million invested on existing pubs; • Head office relocated and rationalised; and • Completion of the previously announced sale of Buckhold Road site for £10.3 million and £58.7 million due on completion of unconditional brewery sale on 4 January 2008. Stephen Goodyear, Chief Executive of Young's, commented: 'I am very pleased with our strong first half performance, which reflects the benefits from the substantial changes made to the company last year and has been achieved despite the twin challenges of the disappointing summer weather and the smoking ban. 'Trading in our pubs in the first six weeks of the second half to date has been resilient, with managed house sales up 8.7% and up 8.3% on a same outlet like for like basis (up 1.4% on an uninvested basis). There are clearly some continuing uncertainties facing the market generally, in particular how the smoking ban might affect trade over the colder winter months, although given the 'summer' we had this contrast may be less obvious. It has also still to be seen whether the summer's economic problems result in a dip in consumer confidence, which in turn could affect leisure spending. 'Despite these challenges, we believe Young's is in very good shape and we are confident in the outlook for the business for the year as a whole.' For further information, please contact: Young & Co.'s Brewery, P.L.C 020 8875 7000 Stephen Goodyear, Chief Executive Peter Whitehead, Finance Director Hogarth Partnership 020 7357 9477 James Longfield / Sarah Richardson INTERIM RESULTS 26 weeks to 29 September 2007 Interim statement The business has delivered a strong first half performance, incorporating benefits from the substantial changes made to the company last year. With these strategic changes now completed, our focus in the period was on operational improvements and the continued drive to secure Young's position at the premium end of the pub sector. The benefits of this strategy are evident in the results: revenues from continuing operations were up 11.9%, adjusted profits up 89.2% and adjusted earnings per share up 105.8% to 69.47p. This has led to another step change in the dividend, with the interim dividend being increased by a third to 24.00p per share. This dividend has now doubled over the last two years, a measure of the Board's determination to deliver increased shareholder value. It will be paid on 7 December 2007 to shareholders on the register on 23 November 2007. Total basic earnings per share were 32.96p, significantly down on last year's earnings which were distorted by the one-off profit from the sale of the brewery and Buckhold Road sites. Retail operations Young's estate is positioned at the premium end of the pub market, focusing on the style, quality and individuality of each outlet, with a strong emphasis on food and service. By investing in high quality pub design, ambience, food and training and by ensuring a premium drinks offering, this consumer led strategy aims to deliver both absolute and like for like sales and profit growth. Managed pubs Revenue was up 13.6%, with like for like growth of 5.7% on a same outlet basis (up 1.9% on an uninvested basis). These figures mask some significant monthly variations, with a very strong start to the half offset by the poor summer weather. Operating profit for our managed division increased 33.0%. A key driver of this performance has been the continued growth of food sales, a major part of our strategy to position Young's at the premium end of the pub sector and as a means to help combat the effects of the smoking ban. Food sales were up 23.9% and now represent 24.5% of revenue. The quality of our pubs and of our food offer has been highlighted in the press and this has been supported by excellent feedback from our customers. The success of our recent redevelopments continues to support our premium strategy. The increase in EBITDA from the investment in major redevelopments in the comparable period (pubs that have now completed their first twelve months post development) delivered a 26.4% cash return. A further £4.3 million was invested in managed pub refurbishments in the first half, including major works at the Brewers Inn in Wandsworth, the Brook Green Hotel, the Bunch of Grapes at London Bridge, the Chequers in Walton on the Hill, the Clockhouse on Peckham Rye, the Crown in Chertsey, the Greyhound in Carshalton, the Halfway House in Earlsfield, the Spotted Horse in Putney and the Windmill on Clapham Common. We are half way through our five year investment plan to refurbish all our 359 hotel rooms. During the six months we refurbished 70 rooms. RevPar for all our hotel rooms (average room rate achieved multiplied by occupancy percentage) was up 14.0% at £42.59, supporting our investment decision. Acquisitions remain a key part of our long term growth strategy but opportunities of the right quality at the right price have been limited. We acquired only one pub in the period, the Rose and Crown in Farnborough, which was bought in the last week of the period for £3.5 million. The eight pubs and the three Thames side developments acquired last year have been fully integrated into the managed estate. These are good investments which we believe will provide attractive returns over the longer term once we have been successful in repositioning the pubs under the Young's brand. 56 of our managed pubs now host their own websites, with over 800,000 hits during the period, an increase of more than 185% over last year, and the pub databases now manage over 100,000 individual e-mail addresses. During the course of the six months these venues sent out a combined total of more than five million e-mails to customers who have registered to receive news about Young's, its pubs, events and products. This provides cost effective marketing with a wide reach and is helping to drive customer visits. In addition to the individual pub websites, Young's has updated and re-launched its corporate website - www.youngs.co.uk. This e-marketing drive is complemented by increased investment in consumer public relations, focusing on promoting and marketing our pubs generally and in particular after significant refurbishments. The profile of our estate has been raised significantly both in the national and local press. Customer service remains a key point of differentiation for Young's with a doubling of training hours in the period and the benefits derived from a dedicated central training team complete with its own facilities at our new head office. Pub managers are incentivised on service levels and on their performance in our independently managed mystery drinker programme which provides feedback on all aspects of a pub's service quality from unannounced visits. Our managed pubs are now achieving average scores of 91%, compared with an industry norm of 84% and our own target based on a selection of premium London pubs and restaurants of 90%. Our aim is to improve these ratings still further. Our managed estate comprised 112 trading sites at the end of the period of which 90 are freehold. Tenanted and leased Revenue was up 1.6%, with like for like growth up 0.8% on a same outlet basis (up 0.5% on an uninvested basis). Operating profit for our tenanted and leased division increased 35.9%. The success of our mystery drinker programme has now been extended to include all of our tenanted and leased pubs as we work to maintain consistent standards across our entire pub estate. The division benefited from a full six months' trade from the six pubs acquired last year and also from the Cock Inn in Maidstone, the Robin Hood in Sutton and the Ship Inn in East Grinstead which were transferred from management during the period. We have invested £0.6 million on refurbishments with major works underway at the Red Cow in Richmond, the Thatched House in Hammersmith, the Black Lion in Surbiton and the Half Moon in Putney. We regularly review the balance of the estate between managed, tenanted and leased to ensure that we are adopting the most beneficial format and we will maintain our programme of investments in high returning projects across the existing pub estate. The total number of tenancies and leases at the end of the half was 104 of which 87 are freehold. Wells & Young's Brewing Company Wells & Young's has now completed its first full year of trading. This has been a transitional year which included the challenge of integrating the Wells, Young's and Courage beers into the portfolio (to which we have received excellent consumer response) and combining the two workforces. Revenue for the six months under review was £108.6 million. Profit, before charging £2.1 million of exceptional costs, was £3.0 million. Young's share of this profit in the period was £1.2 million. This was against a background of a difficult beer market with higher raw material and utility costs compounded by a poor summer. Wells & Young's sold 458,000 barrels in the six months, of which 255,000 were brewed in Bedford. At the end of the period, the southern distribution was outsourced to KN Drinks Logistics. This will not only reduce costs but at the same time provide greater flexibility to exploit sales opportunities over a wider geographical area. Investment and finance We invested a total of £8.4 million in our estate in the period, including one new site, leaving group net debt at the end of the period at £94.5 million. Once adjusted for the remaining £58.7 million due from Minerva in January, this leaves an adjusted net debt position of £35.8 million. This is partly funded by a long dated £15.0 million RBS facility fixed at 6.1%. The remaining debt is at a variable rate. In May 2007 the group redeemed a high coupon debenture at a premium. As noted in the annual report, this resulted in a £6.8 million loss. The redemption of this debenture considerably improves the group's financial flexibility. Young's has substantial headroom for funding acquisitions and we continue to explore opportunities for appropriate acquisitions, though at present these are limited. We have an operating infrastructure and management team capable of managing such growth. In line with the Board's stated policy, investment opportunities will be measured against the benefits of returning capital to shareholders. Certain items have been classified as exceptional in order to give shareholders a better understanding of the underlying trends in the business. These items include the £6.8 million costs resulting from the debenture redemption mentioned above and losses and provision for losses on sales of properties (£0.2 million). These costs are partly offset by the discount on site proceeds; this was an accounting charge made in the prior year which reverses this year. In addition, the results of Young's brewing and wholesaling operation have been separated out as a discontinued operation. International Financial Reporting Standards These are the first financial statements prepared under International Financial Reporting Standards and there have been a number of adjustments and restatements as a result. The detail behind these adjustments is in a separate document called the Restatement of Financial Information to International Financial Reporting Standards ('IFRS') which can be downloaded from the investor relations section of the group's website - www.youngs.co.uk. Photocopies are also available from the Company Secretary on request. There is no material impact on the income statement as a result of IFRS. The major impacts of the new standards, as highlighted in the annual report, are on the group's balance sheet where the net assets have been restated for the effect of the deferred tax on our revalued property and the tax payable on the capital gain on the sale of the brewery and Buckhold Road sites. These liabilities would become payable only if the group were unable to invest the proceeds from the sale of these sites into replacement assets. Outlook We have delivered a strong first half performance, achieved despite the twin challenges of disappointing summer weather and any possible effects of the smoking ban. As expected, the first half benefited from the changes made to the business in October 2006 and therefore these are already included in our second half comparatives. The second half also has a number of uncertainties. How the smoking ban might affect trade over the colder winter months remains to be seen (although given the 'summer' we have had, this contrast may be less obvious). It has also still to be seen whether the summer's economic problems result in a dip in consumer confidence, which in turn could affect leisure spending. Despite these uncertainties, we believe we are in very good shape. Trading in our pubs in the first six weeks of the second half to date has been resilient with managed house sales up 8.7% and up 8.3% on a same outlet like for like basis (up 1.4% on an uninvested basis). We remain confident in the outlook for Young's for the year as a whole. Interim report On 23 November 2007, the Interim Report 2007 will be mailed to shareholders. From that date, copies of it will also be available on the investor relations section of the company's website - www.youngs.co.uk - and on request from the Company Secretary. Independent review report to Young & Co.'s Brewery, P.L.C. For the 26 weeks ended 29 September 2007 Introduction We have been engaged by the company to review the financial information for the 26 weeks ended 29 September 2007 which comprises the Group Income Statement, Group Balance Sheet, Group Cash Flow Statement, Group Statement of Recognised Income and Expense, and the related notes 1 to 10. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. This report is made solely to the company in accordance with guidance contained in ISRE 2410 (UK and Ireland) 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the AIM Rules issued by the London Stock Exchange. As disclosed in note 1, the next annual financial statements of the group will be prepared in accordance with those IFRSs adopted for use by the European Union. The accounting policies are consistent with those that the directors intend to use in the next financial statements. There is, however, a possibility that the directors may determine that some changes to these policies are necessary when preparing the full annual financial statements for the first time in accordance with those IFRSs adopted for use by the European Union. Review work performed We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data, and based thereon, assessing whether the accounting policies have been applied. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the 26 weeks ended 29 September 2007. Ernst & Young LLP London, England 14 November 2007 Unaudited group income statement For the 26 weeks ended 29 September 2007 26 weeks 26 weeks 52 weeks to 29 Sept 07 to 30 Sept 06 to 31 Mar 07 £000 £000 £000 ----------------------------- --------- --------- --------- Continuing operations Revenue 63,885 57,101 114,602 Operating costs before exceptional (51,745) (50,046) (99,214) items ----------------------------- --------- --------- --------- Operating profit before exceptional 12,140 7,055 15,388 items Operating exceptional items (note 4) (8) (1,260) (709) ----------------------------- --------- --------- --------- Operating profit 12,132 5,795 14,679 ----------------------------- --------- --------- --------- Share of associate's profit before exceptional items and tax 1,210 - 83 Share of associate's exceptional (852) - - items (note 4) Share of associate's tax (expense)/ (118) - 21 credit (note 5) ----------------------------- --------- --------- --------- Share of post tax and post minority 240 - 104 result of associate Non-operating exceptional items (225) (183) (444) (note 4) ----------------------------- --------- --------- --------- Profit before interest 12,147 5,612 14,339 Net finance costs (3,094) (2,197) (5,184) Premium on redemption of debenture (6,827) - - (note 7) Discount of site proceeds 1,480 (3,863) (2,161) Other finance income 628 896 1,731 ----------------------------- --------- --------- --------- Profit before tax 4,334 448 8,725 Taxation (note 5) (324) (1,815) (3,919) ----------------------------- --------- --------- --------- Profit/(loss) from continuing 4,010 (1,367) 4,806 operations Discontinued operation (Loss)/profit from discontinued (148) 34,060 31,441 operation (note 2) ----------------------------- --------- --------- --------- Profit attributable to equity 3,862 32,693 36,247 holders of parent ----------------------------- --------- --------- --------- Earnings per 50p ordinary share from continuing operations (note 6) Pence Pence Pence ----------------------------- --------- --------- --------- Adjusted 69.47 33.75 69.97 Basic 34.23 (11.81) 41.41 Adjusted diluted 68.94 32.89 68.53 Diluted 33.97 (11.51) 40.56 ----------------------------- --------- --------- --------- Earnings per 50p ordinary share from continuing and discontinued operations (note 6) Pence Pence Pence ----------------------------- --------- --------- --------- Basic 32.96 282.54 312.33 Diluted 32.71 275.35 305.92 ----------------------------- --------- --------- --------- The comparative figures to 30 September 2006 and 31 March 2007 have been restated for the effects of IFRS. Unaudited group balance sheet At 29 September 2007 At 29 Sept 07 At 30 Sept 06 At 31 Mar 07 £000 £000 £000 ----------------------------- ---------- ---------- ---------- Non current assets Property, plant and equipment 226,906 218,013 223,425 Prepaid operating lease premiums 5,894 5,968 5,918 Investment in associate 23,930 22,508 22,458 Receivable from site disposal - 55,236 - Derivative financial instruments 329 - 179 Deferred tax 3,152 3,399 3,746 Retirement benefit 6,219 - 955 ----------------------------- ---------- ---------- ---------- 266,430 305,124 256,681 ----------------------------- ---------- ---------- ---------- Current assets Prepaid operating lease premiums 92 92 92 Assets classified as held for sale 1,513 666 348 Inventories 1,470 1,419 1,431 Receivable from site disposal 58,069 9,901 66,839 Trade and other receivables 6,300 11,000 4,697 Cash - - 999 ----------------------------- ---------- ---------- ---------- 67,444 23,078 74,406 ----------------------------- ---------- ---------- ---------- Total assets 333,874 328,202 331,087 ----------------------------- ---------- ---------- ---------- Current liabilities Borrowings (60,001) (1,939) (58,185) Trade and other payables (23,534) (20,099) (21,212) Income tax payable (1,413) (66) (2,171) ----------------------------- ---------- ---------- ---------- (84,948) (22,104) (81,568) ----------------------------- ---------- ---------- ---------- Non current liabilities Borrowings (34,519) (100,675) (44,295) Derivative financial instruments - (264) - Provisions (1,771) (2,802) (2,171) Deferred tax (35,316) (36,382) (33,920) Retirement benefit obligations - (902) - ----------------------------- ---------- ---------- ---------- (71,606) (141,025) (80,386) ----------------------------- ---------- ---------- ---------- Total liabilities (156,554) (163,129) (161,954) ----------------------------- ---------- ---------- ---------- Net assets 177,320 165,073 169,133 ----------------------------- ---------- ---------- ---------- Capital and reserves Called-up share capital 6,028 6,028 6,028 Share premium account 1,274 1,285 1,274 Other reserves 2,181 1,623 2,071 Investment in own shares (552) (2,657) (2,123) Retained earnings 168,389 158,794 161,883 ----------------------------- ---------- ---------- ---------- Total equity 177,320 165,073 169,133 ----------------------------- ---------- ---------- ---------- The comparative figures at 30 September 2006 and 31 March 2007 have been restated for the effects of IFRS. Unaudited group cash flow statement For the 26 weeks ended 29 September 2007 26 weeks 26 weeks 52 weeks to 29 Sept 07 to 30 Sept 06 to 31 Mar 07 £000 £000 £000 ----------------------------- ---------- ---------- ---------- Operating activities Cash generated from operations (note 18,533 9,527 27,821 9) Taxes paid - (1,500) (2,706) ----------------------------- ---------- ---------- ---------- Net cash flow from operating 18,533 8,027 25,115 activities ----------------------------- ---------- ---------- ---------- Investing activities Sale of brewery and Buckhold Road 10,250 - - sites Sales of other property, plant and 908 49 468 equipment Purchases of property, plant and (8,442) (37,786) (46,755) equipment Investment in associate - (10,000) (10,000) Restructuring costs (3,603) (4,389) (6,896) ----------------------------- ---------- ---------- ---------- Net cash used in investing (887) (52,126) (63,183) activities ----------------------------- ---------- ---------- ---------- Financing activities Interest received 82 108 3 Interest paid (3,096) (2,384) (5,622) Premium on redemption of debenture (6,827) - - Equity dividends paid (2,269) (1,498) (3,589) Proceeds from exercise of share 1,425 - 535 options in the employee benefit trust (Decrease)/increase in borrowings (8,658) 46,226 47,851 Repayment of finance leases (5) (9) (17) ----------------------------- ---------- ---------- ---------- Net cash flow from financing (19,348) 42,443 39,161 activities ---------- ---------- ---------- ----------------------------- (Decrease)/increase in cash (1,702) (1,656) 1,093 Cash at the beginning of the period 999 (94) (94) ----------------------------- ---------- ---------- ---------- Cash at the period end (703) (1,750) 999 ----------------------------- ---------- ---------- ---------- Group analysis of net debt At 29 September 2007 At 29 Sept 07 At 30 Sept 06 At 31 Mar 07 £000 £000 £000 ----------------------------- ---------- ---------- ---------- Cash - - 999 Bank overdraft (703) (1,750) - Loan capital and finance leases (93,817) (100,864) (102,480) ----------------------------- ---------- ---------- ---------- Net debt (94,520) (102,614) (101,481) ----------------------------- ---------- ---------- ---------- The comparative figures to 30 September 2006 and 31 March 2007 have been restated for the effects of IFRS. Unaudited group statement of recognised income and expense For the 26 weeks ended 29 September 2007 26 weeks 26 weeks 52 weeks to 29 Sept 07 to 30 Sept 06 to 31 Mar 07 £000 £000 £000 ----------------------------- ---------- ---------- ---------- Income and expense recognised directly in equity Actuarial gain on retirement benefit 3,968 2,169 3,539 schemes Actuarial gain (net) on retirement benefit schemes - associate 1,232 - - Cashflow hedges: profits taken to 150 186 629 equity Deferred tax on other items taken (967) 676 322 directly to equity (note 5) ----------------------------- ---------- ---------- ---------- 4,383 3,031 4,490 Profit for the financial period 3,862 32,693 36,247 ----------------------------- ---------- ---------- ---------- Total recognised income for the 8,245 35,724 40,737 period ----------------------------- ---------- ---------- ---------- The comparative figures to 30 September 2006 and 31 March 2007 have been restated for the effects of IFRS. Notes to the accounts (1) Accounts The interim financial statements were approved by the Board on 14 November 2007. They are unaudited, and do not constitute statutory accounts within the meaning of S.240 of the Companies Act 1985. Statutory accounts for the 52 weeks ended 31 March 2007 have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain any statement under S.237 of the Companies Act 1985. Change in accounting policies In accordance with the directive of the Council of the European Union, Young & Co.'s Brewery, P.L.C. has adopted International Financial Reporting Standards ('IFRS') this year, having previously applied UK generally accepted accounting principles ('UK GAAP'). These interim statements are the first that Young's has prepared under IFRS and they have been prepared in accordance with the IFRS accounting policies endorsed by the European Union that management expects to apply in the 2008 full year financial statements. These accounting policies are consistent with those adopted for the restatement of the 2007 financial information. The restatement includes the consolidated financial information at 2 April 2006 (date of transition), for the 26 weeks ended 30 September 2006, and for the 52 weeks ended 31 March 2007. Both the restatement and a summary of significant accounting principles are available as a separate document on the company's website, www.youngs.co.uk. This interim report has been prepared in accordance with the AIM Rules issued by the London Stock Exchange, and in accordance with pronouncements on interim reporting issued by the Accounting Standards Board. As permitted, the interim report has not been prepared in accordance with IAS 34 'Interim Financial Reporting', which is not mandatory for UK Groups. Impact of IFRS on prior period reporting 26 weeks to 30 Sept 06 52 weeks to 31 Mar 07 ------------------ ------------------ Profit Net Profit Net before tax* assets before tax* assets £000 £000 £000 £000 ----------------- ----------- ---------- ---------- ---------- Reported under UK GAAP 5,774 195,334 12,023 199,538 Discontinued operation (36) - (36) - Lease reclassifications 16 (318) 31 (317) Income tax and deferred - (29,758) - (30,213) tax Financial instruments - (185) - 125 ----------------- ----------- ---------- ---------- ---------- Reported under IFRS 5,754 165,073 12,018 169,133 ----------------- ----------- ---------- ---------- ---------- * Continuing operations before exceptional items and discount of site proceeds. Under IFRS, revenue, previously known as turnover, includes only the gross inflows of economic benefits received and receivable by the enterprise on its own account. Amounts collected on behalf of third parties such as excise duty (26 weeks to 30 September 2006: £5,533,000; 52 weeks to 31 March 2007: £5,533,000) are not economic benefits which flow to the enterprise and do not result in increases in equity. Therefore, they are excluded from revenue. The classification and presentation of leased assets changes under IFRS. For leases categorised as operating leases under IFRS, any upfront lease premium amounts paid are treated as a prepayment and not as property, plant and equipment. Accordingly, any revaluation increment previously booked on operating leases is required to be reversed. Under IFRS, deferred tax is recognised in respect of nearly all taxable temporary differences arising between the tax base and the accounting book value of balance sheet items (a balance sheet approach). This results in deferred tax being recognised on certain timing differences that would not have given rise to deferred tax under UK GAAP, including historic property revaluation gains, roll over capital gains tax relief claims, fair value gains on the exchange of assets for the associate, and share based payments. (2) Discontinued operation On 23 May 2006 the group announced the merger of its brewing, beer brands and wholesale operations with the brewing assets, beer brands and wholesale operations of Charles Wells Ltd to form a new brewing business called Wells & Young's Brewing Company Ltd. On 3 August 2006, the group announced the disposal of the Ram Brewery site and the nearby Buckhold Road office and warehouse space in Wandsworth for a total cash consideration of £69 million. The group's brewing, beer brands and wholesale operation has been treated as a discontinued operation in the current and prior periods. The table below shows the results of the discontinued operation included in the income statement of the group: 26 weeks 26 weeks 52 weeks to 29 Sept 07 to 30 Sept 06 to 31 Mar 07 £000 £000 £000 ---------------------------- ---------- --------- ---------- Sales to external customers - 6,501 6,501 Intra-group sales - 10,533 10,533 ---------------------------- ---------- --------- ---------- Total revenue - 17,034 17,034 Operating costs before exceptional - (16,998) (16,998) items ---------------------------- ---------- --------- ---------- Operating profit - 36 36 Non-operating exceptional items Restructuring costs (212) (4,404) (9,016) Profit on sale of Wandsworth sites - 46,608 46,608 Gain on exchange of assets for - 11,205 11,205 interest in associate ---------------------------- ---------- --------- ---------- (Loss)/profit before tax (212) 53,445 48,833 Taxation (note 5) 64 (19,385) (17,392) ---------------------------- ---------- --------- ---------- (Loss)/profit from discontinued (148) 34,060 31,441 operation ---------------------------- ---------- --------- ---------- (3) Adjusted profit before tax and adjusted EBITDA* 26 weeks 26 weeks 52 weeks to 29 Sept 07 to 30 Sept 06 to 31 Mar 07 £000 £000 £000 ---------------------------- ---------- --------- ---------- Profit before tax 4,334 448 8,725 Exceptional items 1,085 1,443 1,153 Premium on redemption of debenture 6,827 - - Discount on site proceeds (1,480) 3,863 2,161 Share of associate's tax expense/ 118 - (21) (credit) ---------------------------- ---------- --------- ---------- Adjusted profit before tax* 10,884 5,754 12,018 Depreciation of continuing 3,472 3,113 6,429 operations - group Depreciation - associate 634 - 679 Net finance costs - group 3,094 2,197 5,184 Net finance costs - associate 593 - 253 Other finance income (628) (896) (1,731) ---------------------------- ---------- --------- ---------- Adjusted EBITDA* 18,049 10,168 22,832 ---------------------------- ---------- --------- ---------- * Continuing operations before exceptional items, premium on redemption of debenture, and discount of site proceeds. Alternative performance measures have been provided as the Board believes that they give a useful additional indication of underlying performance. (4) Exceptional items 26 weeks 26 weeks 52 weeks to 29 Sept 07 to 30 Sept 06 to 31 Mar 07 £000 £000 £000 (a) Operating exceptional items ---------------------------- ---------- --------- ---------- Capital gains tax on ESOP allocated (8) (1,060) (509) shares Property valuation costs - (200) (200) ---------------------------- ---------- --------- ---------- (8) (1,260) (709) ---------------------------- ---------- --------- ---------- (b) Non-operating exceptional items ---------------------------- ---------- --------- ---------- Loss on sales of properties and investments (4) (183) (444) Provision for loss on sales of properties (221) - - ---------------------------- ---------- --------- ---------- Profit/(loss) on sales of property, plant and (225) (183) (444) equipment ---------- --------- ---------- ---------------------------- (c) Associate non-operating exceptional item Restructuring costs (852) - - ---------------------------- ---------- --------- ---------- (5) Tax (charge)/credit 26 weeks 26 weeks 52 weeks to 29 Sept 07 to 30 Sept 06 to 31 Mar 07 £000 £000 £000 ---------------------------- ---------- --------- ---------- Income statement Continuing operations Group excluding associate Tax on profit on ordinary activities (2,885) (1,080) (2,705) Movements in deferred tax (389) (769) (1,214) Adjustment in deferred tax from 30% 902 - - to 28% Tax on non-operating exceptional - 34 - items Tax credit on premium on debenture 2,048 - - redemption ---------------------------- ---------- --------- ---------- (324) (1,815) (3,919) ---------------------------- ---------- --------- ---------- Associate Tax on profit on ordinary activities (373) - 21 Tax on non-operating exceptional 255 - - items ---------------------------- ---------- --------- ---------- (118) - 21 ---------------------------- ---------- --------- ---------- Discontinued operation Group excluding associate Tax on profit on ordinary activities - (10) (10) Movements in deferred tax - (1) (1) Tax on non-operating exceptional 64 (19,374) (17,381) items ---------------------------- ---------- --------- ---------- 64 (19,385) (17,392) ---------------------------- ---------- --------- ---------- Statement of recognised income and expense Movements in deferred tax (1,171) 676 322 Adjustment in deferred tax from 30% 204 - - to 28% ---------------------------- ---------- --------- ---------- (967) 676 322 ---------------------------- ---------- --------- ---------- (6) Earnings per 50p ordinary share 26 weeks 26 weeks 52 weeks to 29 Sept 07 to 30 Sept 06 to 31 Mar 07 £000 £000 £000 (a) Earnings ------------------------------ ---------- ---------- ---------- Profit/(loss) from continuing 4,010 (1,367) 4,806 operations (Loss)/profit from discontinued (148) 34,060 31,441 operation ------------------------------ ---------- ---------- ---------- Profit attributable to equity 3,862 32,693 36,247 holders of the parent ------------------------------ ---------- ---------- ---------- Profit/(loss) from continuing 4,010 (1,367) 4,806 operations Operating exceptional items, net of 8 1,260 709 tax Non-operating exceptional items, net 225 149 444 of tax Associate exceptional items, net of 597 - - tax Premium on redemption of debenture, 4,779 - - net of tax Discount of site proceeds (1,480) 3,863 2,161 ------------------------------ ---------- ---------- ---------- Adjusted earnings after tax from 8,139 3,905 8,120 continuing operations ------------------------------ ---------- ---------- ---------- Number Number Number ------------------------------ ---------- ---------- ---------- Weighted average number of ordinary 11,716,342 11,570,927 11,605,450 shares in issue Add: the notional exercise of the weighted average number of ordinary share options 89,849 302,155 243,158 outstanding during the year ---------- ---------- ---------- ------------------------------ Diluted weighted average number of 11,806,191 11,873,082 11,848,608 ordinary shares in issue ------------------------------ ---------- ---------- ---------- (b) Basic earnings per share Pence Pence Pence ------------------------------ ---------- ---------- ---------- Basic from continuing operations 34.23 (11.81) 41.41 Effect of exceptional items, premium 35.24 45.56 28.56 on redemption of debenture and ---------- ---------- ---------- discount of site proceeds ------------------------------ Adjusted from continuing operations 69.47 33.75 69.97 ------------------------------ ---------- ---------- ---------- Basic from continuing operations 34.23 (11.81) 41.41 Basic from discontinued operation (1.27) 294.35 270.92 ------------------------------ ---------- ---------- ---------- Basic 32.96 282.54 312.33 ------------------------------ ---------- ---------- ---------- (c) Diluted earnings per share Pence Pence Pence ------------------------------ ---------- ---------- ---------- Diluted from continuing operations 33.97 (11.51) 40.56 Effect of exceptional items, premium 34.97 44.40 27.97 on redemption of debenture and ---------- ---------- ---------- discount of site proceeds ------------------------------ Adjusted diluted from continuing 68.94 32.89 68.53 operations ------------------------------ ---------- ---------- ---------- Diluted from continuing operations 33.97 (11.51) 40.56 Diluted from discontinued operation (1.26) 286.86 265.36 ------------------------------ ---------- ---------- ---------- Diluted 32.71 275.35 305.92 ------------------------------ ---------- ---------- ---------- The weighted average number of shares in issue excludes the group's investment in its own shares. Adjusted earnings per share and adjusted diluted earnings per share are presented to eliminate the effect of the exceptional items on basic and diluted earnings per share. (7) Premium on redemption of debenture The 9.5% debenture stock, repayable at par on 14 September 2018, and secured by a floating charge over the company's assets and undertaking, was redeemed in advance on 21 May 2007. As a result of this repayment, the group has recognised a loss before tax of £6,827,000 in the income statement in the period. (8) Ordinary dividends on equity shares 26 weeks 26 weeks 52 weeks to 29 Sept 07 to 30 Sept 06 to 31 Mar 07 Pence Pence Pence ------------------------------ ---------- ---------- ---------- Final dividend 19.35 12.90 12.90 Interim dividend - - 18.00 ------------------------------ ---------- ---------- ---------- 19.35 12.90 30.90 ------------------------------ ---------- ---------- ---------- The trustee of the Ram Brewery Trust has waived its rights in respect of the dividends on the shares held in the trust on behalf of the directors' share option schemes. (9) Net cash generated from operations 26 weeks 26 weeks 52 weeks to 29 Sept 07 to 30 Sept 06 to 31 Mar 07 £000 £000 £000 ------------------------------ ---------- ---------- ---------- Operating profit from continuing and 12,132 5,831 14,715 discontinued operations Depreciation 3,472 4,349 7,665 Employee benefit trust share 786 204 744 allocations Provision for capital gains tax on 8 1,060 509 ESOP allocated shares Share based payment - - 90 Movements in working capital Inventories (39) 2,774 2,716 Receivables (1,356) (4,161) 2,485 Payables 3,530 (530) (1,103) ------------------------------ ---------- ---------- ---------- Net cash generated from operations 18,533 9,527 27,821 ------------------------------ ---------- ---------- ---------- (10) Reconciliation of movements in equity 26 weeks 26 weeks 52 weeks to 29 Sept 07 to 30 Sept 06 to 31 Mar 07 £000 £000 £000 ------------------------------ ---------- ---------- ---------- Total recognised income for the 8,245 35,724 40,737 period Dividends (2,269) (1,498) (3,589) Movement in own shares: Employee benefit trust allocations 2,211 204 1,279 Share based payment: Movement for the period - - 90 Deferred tax on movement - - (27) ------------------------------ ---------- ---------- ---------- 8,187 34,430 38,490 Opening equity 169,133 130,643 130,643 ------------------------------ ---------- ---------- ---------- Closing equity 177,320 165,073 169,133 ------------------------------ ---------- ---------- ---------- This information is provided by RNS The company news service from the London Stock Exchange

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Young & Co's Brewery 'A' Shares (YNGA)
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